Advice? Am I crazy? My plan to become a billionaire.

Hello


I just want to start off with wanting some advice and criticism from people.
My plan is as follows;

  • Work in IB 3 years.
  • Go to top 5 B school.
  • Go into PE.
  • Work up to MD--preferably early in career (maybe 36?)
  • Work as MD till 48.
  • Start my own financial firm. This is where I am kind of torn. I don't know if I would want to start an IB, PE firm, or holdings company. Never HF or VC, I would hate that.

Is there any general advice anyone can give? I know the world will change tremendously in the next 30 years of my life (I am still in college).

 

the real question is what follows what, 1. does a great individual that is destined to be a billionaire simply exists and decides to go to Harvard or 2. is Harvard responsible for their success? because for me it was, it is, and it will always be the first option.

and I thought it was already well-known that Harvard/Ivies pick candidates with huge potential and then, after decades, the school takes pride in how their success is attributed to the school they went when their success is 100% their merit (--> school is considered top quality --> attracts more people --> bigger candidate pool thus higher chances of picking quality students among many --> quality students get accepted --> they accomplish great things --> Harvard takes pride in that --> school is considered top quality, and the cycle repeats itself on and on)

there would had been no difference for a Zuckenberg going at Harvard vs. Kentucky

for finance is a bit different, you'll make more money because you'll have a red carpet for recruiting at top banks that promise better exits at buy-side, but that's a far cry from being a billionaire, at best you get $10-20M by your 40/50s

 

Ignoring the rest of this since who knows what will happen in your career, but for your early career planning you can't go IB -> Bschool -> PE. No PE firm will take you out of MBA with no prior PE experience. You need to do oncycle (which happens before you even start in IB) to land your PE role, 2 years of IB and then 2 years of PE. After that you can decide to continue in PE or do an MBA (most skip the MBA these days, it's expensive and not needed)

 

Even assuming you hit the first 5 bullets in stride without much resistance, that still puts you at about 97% away from your goal. A successful PE partner with maybe a decade of tenure at the partner level probably has maybe a net worth of low-to-mid 8 figures in an absolute best-case scenario, assuming several successful exits. So getting to that point is probably like a <5% probability outcome if you tally the numbers from an entire "vintage pool" of IB candidates that start their career in a given year and count the number of candidates that achieve that outcome ~20 years later.

Then you're back at square 1 with starting your own investment firm in your 40s and you're still 97% away from your goal of being a billionaire because your NW is only ~30 million and you're 45 years old. Let's assume the economics of PE is still attractive in 20 years and you can still make bank by running your own firm. From here, the path to 10 figures is much less linear than it was for you when you climbed the ranks from IB to PE partner. Your new firm can flame out and you could possibly lose most of your NW. Or you could become a middling PE shop where you actually make less per annum than what you made at your top-tier firm when you were a partner clipping your checks.

Ok. So it's very hard and not entirely straightforward to scale your new PE venture into a successful multi-billion dollar AUM firm over the course of many years. That's why there are so few UMM / MFs and most of those had first mover advantage, meaning they opened up shop in the 90s / 00s before private equity was a mainstream investment product. This allowed them to grow AUM quickly due to less competition and successful early investments.

So we've established that starting at square 1 (opening your own PE firm, assuming you easily hit the first 5 bullets of your plan) and scaling your firm is incredibly hard, and the probability outcome of that is maybe ~1% among all new PE firms. So take 3% * 1% and those are your odds.

It's like saying "I want to a top 10 richest person in the world, here is my plan for starting my own tech company...". The issue with this line of thinking is even if you are successful along every step of the way in your plan, you'll still likely be 99% away from your goal. That's just math, there can only be 10 richest people in the world and there can only be XXXX billionaires, for every person that aspires to be one (there are many).

EDIT: the math is illustrative ballparking but the real final number is probably way lower. 

 
Most Helpful

I would say it’s certainly fair to conclude that the ceiling in finance is very high, and you can realistically become very wealthy in this field. You would have to be a business owner, be significantly impactful and innovative and also have luck to make a billion+. I think the luck aspect is big - many of those billionaires who if born again to fill the shoes of a 20 year old today even with the same skills, knowledge and resources can undoubtedly become very successful, but may not necessarily be able to replicate the exact same result again today

Additionally if this post is even real, the last thing you should do is let people, especially internet strangers, tell you what your ceiling is, you don’t really know who is actually giving advice behind your screen, could be some washed out loser for all you know

Would instead think the more important question for you and for people to address is: what can you do to best position yourself for success in the field, if this is truly the career plan you have

 

Lol fair you don't become a billionaire or anywhere near that by taking advice on internet forums, this is moreso a page just for job and recruiting related advice, maybe a page that helps with some technical aspects of the job

 

I am quite curious, troll post or not, how wealthy PE partners usually become. 

 

$50-$100mm net worth by retirement for Partners at large funds ($3bn+)

 

Several senior but non-founding and non-IC sitting senior partners at my UMM are well into the low 9 figure net worth territory

It is hard to define retirement in PE as people eventually get pushed out, even partners. But if you really retire in PE (meaning in your sixties), you should be worth way more than that given you would have been a partner for 15-20 years. 

The thing is the median partner tenure is probably around 5 years and then they go on to do something else and the figure above is probably within the ballpark.

 

He worked in private credit though, which in some places like KKR, doesn’t even get carry on their funds these days, or very minimal (400k at pc partner vs millions in PE)

 

He was also only 40 supposedly, so likely just recently got promoted to that title. Give it 10-15 years and he'd be worth much more, even if he was working in credit (much lower return profiles and low to no carry, which is very different from pe)

 

I think it’s very important to think about the options and to plan the career. Understand why and how people are successful 

that said as a 2000’s engineering graduate I have 2 friends who are in the B club and neither could have imagined the path they took 

life is very random and instead of planning the course I’d encourage you need to seize the opportunity at hand 

 

I have been able to meet a few billionaires who have made their money off of their funds. The only way they could do that was their partners already had capital of $5M+ (adjusted for inflation) and could do a Buffett-style buy and hold as well as leading IPO cap tables to get to the 10-figures club. They also went into the funds straight out of graduate school (all top schools) or worked for >10 years before joining the funds they are still at. As stated in previous comments, they could only have these opportunities due to their networks. 

 

Network is everything. It’s who you know not what you know. Op look at what people like Brad Lightcap did. He will most likely be a Billionaire if he continues playing his cards right. 

Nah
 

You thinking wrong life to short. You don't know if you will live to be 48. Go buy a business now go look into search fund or fund less sponsor. Find a deal the money will come. Stop buying in this corporate dreams Bs take a leap of faith.

 

Repudiandae perspiciatis mollitia consequatur hic beatae. Reiciendis repudiandae adipisci ea esse expedita. Sapiente assumenda ut cum ea accusantium quasi. Qui sint magni sint aut inventore est. Necessitatibus voluptas ipsum similique architecto. Eligendi neque laudantium explicabo ex.

Soluta voluptatibus hic culpa nemo. Est sed repudiandae veritatis cupiditate nisi.

A nulla ut est architecto ut et ut qui. Adipisci ratione beatae ut. Explicabo aut dolorem nulla iusto sunt fuga.

 

Sint quidem quisquam aut sunt. Vero dolores ut ea qui. Quisquam architecto magni velit.

Rerum et non quia maxime cum rerum. Pariatur numquam repellat excepturi delectus est est mollitia. Autem rerum quidem perspiciatis delectus eum aut voluptatibus. Autem unde explicabo autem rerum voluptate alias.

Et alias quod fugiat ipsum. Porro officiis aut consequatur molestiae distinctio. Repellat ea ex quo porro.

Career Advancement Opportunities

March 2024 Private Equity

  • The Riverside Company 99.5%
  • Warburg Pincus 99.0%
  • Blackstone Group 98.4%
  • KKR (Kohlberg Kravis Roberts) 97.9%
  • Bain Capital 97.4%

Overall Employee Satisfaction

March 2024 Private Equity

  • The Riverside Company 99.5%
  • Blackstone Group 98.9%
  • KKR (Kohlberg Kravis Roberts) 98.4%
  • Ardian 97.9%
  • Bain Capital 97.4%

Professional Growth Opportunities

March 2024 Private Equity

  • The Riverside Company 99.5%
  • Bain Capital 99.0%
  • Blackstone Group 98.4%
  • Warburg Pincus 97.9%
  • Starwood Capital Group 97.4%

Total Avg Compensation

March 2024 Private Equity

  • Principal (9) $653
  • Director/MD (21) $586
  • Vice President (90) $363
  • 3rd+ Year Associate (88) $280
  • 2nd Year Associate (204) $268
  • 1st Year Associate (384) $228
  • 3rd+ Year Analyst (28) $157
  • 2nd Year Analyst (83) $134
  • 1st Year Analyst (244) $122
  • Intern/Summer Associate (32) $82
  • Intern/Summer Analyst (312) $59
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
BankonBanking's picture
BankonBanking
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
Secyh62's picture
Secyh62
99.0
5
GameTheory's picture
GameTheory
98.9
6
kanon's picture
kanon
98.9
7
CompBanker's picture
CompBanker
98.9
8
dosk17's picture
dosk17
98.9
9
Jamoldo's picture
Jamoldo
98.8
10
Linda Abraham's picture
Linda Abraham
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”